New Jersey pension system invests in hedge funds

Bloomberg reports:

New Jersey's state-employee pension fund for the first time will put money into hedge funds, the state's top investment official said.

The fund also plans to hire advisers to try to double or triple its investment in emerging markets, William Clark, head of the state Division of Investment, said this week.

State documents show that the pension fund will give a total of $300 million to four hedge-fund firms - Archipelago Partners L.P., AG Super Fund L.P., BGI Multi-Strategy Fund, and OZ Domestic Partners.

New Jersey's $72 billion public pension fund, the eighth-largest in the United States, invested only in stocks and bonds until last year. The fund's policymaking board then committed to putting at least $9 billion into private-equity, real estate and hedge funds.

The changes were made as part of efforts to improve returns and offset a deficit that investment board chairman Orin Kramer estimates at more than $30 billion.

Hedge funds use sophisticated investment strategies to try to wring higher, or at least steadier, profit than traditional investments, such as stocks and bonds.